iPhone, iPod touch "cannibalizing" traditional iPod marketSales of traditional MP3 players like the iPod nano, iPod shuffle and iPod classic continue to decline, as the enemies of these Apple products — the iPhone and iPod touch — come from within the same company.
Peter Oppenheimer, Apple's chief financial officer, said the company had expected that consumers would lose interest in traditional MP3 players over time, and that was one of the reasons the iPhone platform was created.
"We expect our traditional MP3 players to decline over time," Oppenheimer said during Tuesday's earnings report conference call, "as we cannibalize ourselves with the iPod touch and the iPhone."
Later, Chief Operating Officer Tim Cook also used the word "cannibalization" to define the iPhone chipping away at traditional iPod sales.
Realizing that iPod sales would slow, Apple has lowered channel inventory of its lineup by about 400,000 units. Cook said this was partially due to the shrinking market for traditional MP3 players.
Together, the iPhone and iPod touch have sold 45 million units. Year over year, sales of the iPod touch increased 130 percent in the third quarter of the 2009 fiscal year.
"Customers continue to embrace this outstanding platform experience, which has been increasingly enhanced by the tremendous offering for the App Store," Oppenheimer said.
While Apple has portrayed a future of diminishing returns for traditional iPods, the market is hardly dying. In the third quarter, Apple sold 10.2 million iPods — more than the total number of sold iPhones and Macs combined.
Apple also controls 70 percent of the MP3 player market, and announced Tuesday that 50 percent of customers who buy an iPod are new to the brand.
"We have a great business that we believe will last for many, many years," Oppenheimer said of traditional iPods, "and which we will continue to manage well and offer the worlds most innovative products."
On Topic: iPhone
- Chinese iPhone and iPad trade-in program encounters weak public reception
- Samsung Galaxy S6 delivers poor graphics performance vs. Apple iPhone 6 Plus
- Todoist for iOS gets major upgrades, New York Times creates 'one-sentence stories' for Apple Watch
- Reviewers say Samsung's Galaxy S6 tops Android heap, but S6 Edge is solution in search of problem
- Two-thirds of Apple Pay users running into problems at checkout, survey claims